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Unsecured loans for tenants – The only option for non-homeowners

Tenants (council tenants, housing association tenants, private property tenants or folks living with their parents like student) are people who do not have their own house or residential property and live in somebody else’s house. As tenants are incapable of pledging collateral, the only option left for them is unsecured loans. Though primarily designed for tenants, these loans can also be availed by homeowners or property owners, as they may not be willing to get into property related legalities or risk his property for a small amount.

It is a known fact that homeowners or property owners can easily take advantage of their assets to get favourable loan deals like quick attention, high credit limit, competitive low APR, flexible payback terms and negotiable loan conditions. However, tenants miss out on most of that. Typically, unsecured loans for tenants are a bit expensive – low credit limit, comparatively high APR, fixed payback terms and non-negotiable loan conditions. However, these loans have other advantages that are not there with secured loans like:

  • No collateral – no deposit against the loan amount
  • Less paperwork – no red tape
  • Quick service – fast loan processing
  • No immediate risks in the event of repeated defaults or non-repayment

    Unsecured loans for tenants are also ideal for people who have small monetary requirements, as offering collateral may not be necessary and for people who have urgent needs, as getting into lengthy property evaluation procedures may not be feasible.

    These loans can be used for a variety low credit requirements – new or used car purchase, education or career development plans, wedding expenses, home improvement plans, vacation and holiday season expenses, business requirements, debt consolidation, bad credit, etc. As with most loans, unsecured loans for tenants too have basic eligibility criteria. A person applying for this loan should:

  • Have a savings account in the UK to which he makes regular payments
  • Be in a full time employment
  • Have lived at his current address for over a year
  • Have made regular rent payments (not applicable in case of those living with their parents)

    Please note: The basic criteria to avail an unsecured loan for tenant is – credit history and DTI ratio. In addition, the APR may vary according to the type and amount of loan required, and desired payback scheme and period. Generally, an unsecured loan for tenant has an amount range of £500 to £15,000; an APR range of 7.4% to 41 % Variable (typical rate is 19.9% APR Variable) and a compensation term up to 10 years. A typical unsecured loan for tenants deal may look like:

  • Amount borrowed & 8594; £5,000
  • Payback duration & 8594; over 60 months
  • APR (Average Percentage Rate) & 8594; 8.3%
  • EMI (Estimated Monthly Instalment) & 8594; £101.59
  • Total payback amount & 8594; £6,094.94
  • Procure unsecured loans quickly

    People show inclination towards unsecured loans, when they have to borrow a smaller loan amount with a shorter repayment term. For availing an unsecured loan, you need not have to put your home at stake. So, the first and the foremost benefit which you have here is that you can avoid the threat of repossession of your property.

    Whether you are a tenant or a homeowner, you can avail unsecured loans for meeting your different needs. The eligibility criteria for availing an unsecured loan is that you need to be above 18 years of age and should be employed. The loan criteria can vary from lender to lender.

    An unsecured loan comes with a fixed as well as a variable APR (Annual Percentage Rate). In a fixed interest rate loan, the interest rate would remain the same throughout the loan tenure. On the other hand, with variable interest rates, the rates can go up and down according to the base rates of the Bank of England.

    People with poor credit can also seek an unsecured loan, if they meet the specific loan criteria of the lenders. A bad credit history can be anything like defaults, missed payments, County Court Judgments, or bankruptcies. Bad credit unsecured loansnot only helps us in meeting monetary requirements, but can also help us in improving your credit score. Once you have improved your credit score, you can easily avail a loan in the future.

    There are various lenders in the UK who provide online loans. You can approach any high-street banks, building societies and private lenders across the UK. Due to the fierce competition among the private lenders, they can offer you a loan on competitive APR (Annual Percentage Rate).

    Unsecured loans can be procured fast, as compared to a secured loan type. This is because the valuation of collateral doesn’t take place with unsecured loans. Therefore, the turnaround time in the entire loan processing gets reduced.